Commercial rebates and incentives for HVAC, heat pumps and water heating
There’s real money on the table for electrification and efficiency upgrades in Western Washington, but every program has its own rules and paperwork. We know them, and we handle the applications.
Why it matters
- Some programs need approval before you buy. Seattle City Light won’t pay for equipment purchased or installed before it approves the project. Miss that step and the money’s gone.
- Programs stack. A midstream discount, a utility rebate and a Clean Buildings incentive can sometimes apply to the same project.
- Funds run out. Several programs are first come, first served.
Commercial programs in our area
| Program | What it pays for | Incentive | Key rules |
|---|---|---|---|
| WA Clean Buildings Tier 2 Early Adopter Incentive (WA Commerce) | Tier 2 compliance: buildings 20,000–50,000 sq ft and multifamily over 20,000 sq ft | $0.30/sq ft base; $0.75/sq ft for multifamily owners who sign an anti-displacement agreement | Apply by July 1, 2027. First come, first served. Over $138M left as of Sept 24, 2026 |
| WA Clean Buildings Tier 1 Early Adopter Incentive (WA Commerce) | Tier 1 non-residential, hotel, motel and dorm buildings over 50,000 sq ft | One-time incentive from a $75M fund | Listed as available by Commerce |
| Seattle City Light: commercial heat pump water heater systems | Central heat pump water heating meeting NEEA’s Advanced Water Heating Specification 8.0 | $0.36 per kWh saved | Systems 120 gallons and under not eligible. Pre-approval required before buying or installing. Capped at 70% of project cost |
| Seattle City Light: heat pumps & VRF | Replacing electric resistance heat with heat pumps or VRF | $0.36 per kWh saved | Existing heat must be electric resistance. Pre-approval required |
| Seattle City Light: controls, DOAS, VSDs, refrigeration | Building automation, advanced rooftop controls, DOAS, variable speed drives, refrigeration upgrades | $0.06–$0.36 per kWh, or per-unit/per-ton amounts (e.g. advanced rooftop controls $120–$500/ton, walk-in ECM evaporator motors $140/unit) | Pre-approval required |
| Seattle City Light: small business stacked rebates | Heat pumps under 5.4 tons and heat pump water heaters under 120 gallons | Up to $10,000 off heat pumps; up to $4,000 off heat pump water heaters (stacked with midstream discounts) | Fewer than 50 employees; City Light customer in Seattle, Shoreline, Lake Forest Park or Burien. Retrofits only. Until funds run out |
| PSE: commercial heat pump water heater rebate | ENERGY STAR Tier 3+ heat pump water heaters with a CTA-2045 port, replacing electric resistance | $650 per unit | PSE commercial electric customers. Apply within 60 days. Can be taken as an instant discount on our invoice. Units over 119 gal go through PSE custom grants |
| PSE: midstream instant discounts | Air-source heat pumps 5.4 tons and under, plus some water heating and boiler equipment | Instant discount at purchase through participating distributors | Comes off the equipment price. Ask us when we quote |
| PSE: ductless heat pumps, PTHPs, controls, custom grants | Converting electric resistance to ductless heat pumps, PTHP replacements, advanced rooftop and major HVAC controls, custom retrofits | Varies by measure | PSE no longer offers direct incentives for replacing large commercial HVAC equipment |
| Snohomish County PUD: commercial HVAC & water heating | Air-source and ductless heat pumps, VRF, PTHPs (lodging and residential care), unitary heat pump water heaters, advanced rooftop controls, VFDs, walk-in and display case refrigeration measures | Heat pump retrofits $1,000/ton (upgrades $150–$300/ton); VRF $1,500/ton; unitary HPWH $2,000/unit; advanced rooftop controls $150–$250/ton; walk-in ECM evaporator motors $140/motor | Business customers of Snohomish PUD (Everett, Marysville and most of Snohomish County). Heat pumps need an AHRI certificate. Program effective June 1, 2026 |
| Tacoma Power: commercial heating & equipment | Ductless and air-source heat pumps, PTHPs, VRF, VFDs on fans and pumps, web-connected thermostats | Heat pump retrofits from electric resistance $1,000/ton (upgrades $150–$300/ton); PTHP $450/unit; VRF $400/ton; VFDs $470/hp (fans), $230/hp (pumps); Custom Retrofit up to 70% of eligible cost | Business locations in Tacoma Power territory. Apply before install or within 180 days after, with final invoice and photos. Confirm eligibility with Tacoma Power before buying |
Snohomish County PUD and Tacoma Power programs listed here are for commercial customers only.
Program details as of October 2026. Utility and state programs change and can run out of funds, so we confirm current amounts and eligibility before you buy anything.
Sources: PSE commercial HPWH rebate · PSE residential HPWH rebate · PSE business HVAC programs · Seattle City Light commercial retrofit incentives (6/24/2026) · City Light small business stacked rebates · WA Commerce Tier 2 incentive · WA Commerce CBPS incentives · Snohomish PUD C&I rebates (6/1/2026) · Tacoma Power commercial HVAC rebates
For homeowners
- PSE heat pump water heater rebate: $1,000 on qualifying Tier 3 or Tier 4 units ($1,100 with PSE’s income-qualified Efficiency Boost), for PSE electric customers, on new equipment installed on or after January 1, 2026. Installers can pass it through as an instant discount.
- Heat pump rebates: PSE and Seattle City Light offer residential heat pump rebates that change through the year. We check what applies to your address. (For homes, we work with PSE and Seattle City Light programs. The Snohomish PUD and Tacoma Power programs on this page are commercial.)
- Federal tax credits: the federal home efficiency credits for heat pumps and heat pump water heaters (IRS 25C/25D) ended for equipment placed in service after December 31, 2025. Utility and state rebates are now the main incentives.
Want to spread out the rest of the cost? See financing.
How it works
Tell us about the building
Address, utility, square footage and what equipment you have.
We find the programs
We match the project to utility, state and Clean Buildings incentives and flag any pre-approval steps.
We do the paperwork
Pre-approvals, applications, invoices with the rebate line items, and closeout documents.
We build it
Install, commission and document it so the incentive pays out.
Common questions
Are there rebates for commercial heat pump water heaters in Washington?
Yes. PSE pays $650 per qualifying commercial heat pump water heater that replaces electric resistance, and Seattle City Light pays $0.36 per kWh saved on larger central heat pump water heating systems that meet NEEA’s Advanced Water Heating Specification, with pre-approval. Amounts as of October 2026.
Do I need approval before buying equipment to get a Seattle City Light incentive?
Yes. City Light’s commercial retrofit incentives require review and approval before equipment is purchased or installed.
How much is the Washington Clean Buildings Tier 2 incentive?
$0.30 per square foot, or $0.75 per square foot for multifamily owners who sign an anti-displacement agreement. Applications are due by July 1, 2027, and funds are first come, first served.
Are federal tax credits still available for heat pumps?
Not for homeowners. The federal 25C and 25D credits ended for equipment placed in service after December 31, 2025. Utility and state rebates still apply.
Planning a full gas-to-electric conversion? See building electrification.
Ready when you are
Send us the address and what you’re thinking about replacing. We’ll tell you what incentives apply before you spend a dime.
Licensed, bonded & insured · WA Contractor License OMNIMMI779PR · WA Electrical Contractor (HVAC/Refrigeration) EC OMNIMMI740OS · Commercial financing available